New rules and new friends?

We continue to wait for a ruling from the Eighth Circuit whether to stay or not stay the lockout. The fact that the Court set a date by which the NFL’s brief on the appeals was due (Monday) and did not rule on the stay by then is – in my view – another telling signthat the lockout will stay in effect through the appeal into late June. Of course, the Court may surprise me, but all indications from the Court have been that the lockout will remain for another month or so.

In the past couple of days, there have been a couple interesting issues on the periphery of Courtroom football; issues that merit some comment and analysis.

Rules to live by

In the event the Eighth Circuit rules that the lockout should be lifted – whether through denying the stay or affirming the decision of Judge Nelson to grant the Players an injunction – the NFL must then set some rules to play under during the temporary period from that point until we have a negotiated collective bargaining agreement (CBA).

Most, including myself, had predicted that the NFL will revert to the 2010 rules, whose primary features are no Salary Cap(floor or ceiling), a 30% rule limiting extensions for younger players, and a six-year requirement for unrestricted free agency (UFA) instead of the four-year requirement in prior years.

I expected the 2010 rules for a couple of reasons: (1)the NFLPA, prior to decertification, had suggested that they would continue operating under the existing system while negotiating a new CBA; and (2) the 2010 rules were contemplated, negotiated and agreed to under the 2006 CBA, rules for the last year of the Agreement to offset no Salary Cap.

Now word comes, first from Sports Business Journal and confirmed by the NFL, that league executives are discussing work rules that may be different from 2010. There has been no comment as to what the differences may be, but here is what may be going on in their thinking.

Restricted and afflicted

Jackson was a RFA last year and franchised this year due to the 2010 rules.

I sense the NFL is worried about the six-year requirement for free agency. The bulk of the free agent talent last year – and this year – is the “limbo” group of free agents, the four and five-year players stuck in restricted free agency (RFA) due to the system. The 2010 UFA class – diluted due to the six-year requirement – did not garner the level of spending as in prior years. The NFLPA filed a collusion charge on January 18th for the lack of RFA activity in 2010, still pending.

The NFL knows it must be careful with the prospect of having another “limbo” RFA group in 2011 while in an antitrust litigation with the players. Players such as Brady v. NFL plaintiffs Logan Mankins and Vincent Jackson already went through limbo status in 2010 and have been given the Franchise tag in 2011. The NFL knows that, unlike in 2010, not only will the NFLPA be watching spending on the talented group of RFAs, but the courts will be as well.

Capless

I do not think the NFL would impose a Cap under temporary rules if the lockout were lifted; the amount and specifics of the Cap need to be negotiated with the Players. This points out the problem with any temporary rules in the NFL during a period where the lockout would be lifted yet there would be no CBA. Many teams cited labor uncertainty as a reason for lack of spending in the uncapped – and unfloored – 2010. Teams such as the Buccaneers, Cardinals, Chiefs, Chargers, Jaguars, Bills and Panthers all spent well below the Cap minimum in 2009. If teams were reluctant to spend in the year prior to the CBA expiring, how much are they going to spend in a temporary system while the Players are suing them?

Stay tuned.

Friends are watching

From the start of this ongoing NFL-NFLPA labor dispute/litigation, other leagues and unions have been watching intently. With labor agreements expiring in the near future, the NBA, MLB and NHL and their respective players’ associations are all paying close attention to strategies employed by both sides.

This became more apparent Monday when the National Hockey League filed an “amicus curiae”, or “friend of the court” brief in the Eighth Circuit supporting the NFL’s position.

The NHL, as expected, focuses on the issue that has left the NFL and its brethren foaming since March 11th: the ability of sports unions to exist as a union in collective bargaining one minute only to dissolve and file an antitrust lawsuit moments later. Having gone through its own lockout and having used attorney Bob Batterman — now guiding the NFL in its legal strategy — the NHL is a highly interested observer.

Other leagues are hoping the NFL’s cadre of lawyers can show the Eighth Circuit – upon failing at the district court level – that this tactic of “flipping the switch” should not be allowed. If it were, the argument goes, every sports union would simply go through the motions of negotiating a new CBA until the expiration of its agreement, whereupon it would decertify and bring an antitrust lawsuit.

The NHL, as the NFL, fears the consequences. In bargaining, leagues can control the outcome. In court, they cannot.

Union lessons

Similarly, these are pivotal moments for sports unions. These unions are anomalies to begin with, having constituents making north of $20 million per season in the same union as hundreds of players making minimum salary. As written by top NBA agent Arn Tellem, we may be at a time and place where the role of unions in major sports may be changing. Player leaders are realizing that more gains can be made through litigation than negotiation with powerful sports leagues. The NFL situation will guide that.

The league and union with the most immediate concerns and interest in Brady v. NFL is the NBA, whose CBA expires at the end of June. The NBPA will be deciding whether to pursue decertification while the NBA decides whether to lock out its players. Collective bargaining negotiations have been fruitless as the NBA seeks a rollback due to player costs outpacing revenue growth (sound familiar?). And notably, representing the NBPA is a familiar face – Jeffrey Kessler, attorney for the former NFLPA.

The outcomes of the NFLPA’s instant decertification and subsequent player lawsuit against the NFL will be road maps for other major sports leagues and unions to come.

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